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Laser business

Laser Machine Cost Per Hour Calculator

Work out what an hour on your machine actually costs — then use that number in every quote instead of guessing at it.

Your numbers

Use your own costs — the defaults are only a starting point.

Machine and setup

Everything it cost to get the machine working, not just the sticker price.

Life and utilization

The utilization figure changes the answer more than anything else on this page.

Annual running costs
Power
Return target

Your numbers stay in this browser. Nothing is sent to a server unless you choose to save or share.

True machine cost per hour: $7.01
26 input fields available.

How this calculator works

Ask a maker what their laser costs to run and you will usually get an electricity calculation. That number is correct and almost irrelevant: power is typically under 5% of the real total.

This calculator recovers the full annual cost of owning and running the machine across the hours you can actually bill. Work it out once a year and reuse it in every product calculator.

The formula

  1. Capital base = machine + accessories + shipping + installation + chiller + air assist + extraction + compressor
  2. Annual depreciation = (capital base − resale value) ÷ useful life in years
  3. Annual electricity = (machine kW + ancillary kW) × rate per kWh × operating hours
  4. Billable hours = operating hours × (1 − unbillable share)
  5. Machine cost per hour = total annual cost ÷ billable hours
  6. Recommended billable rate = cost per hour ÷ (1 − target margin)

What to watch for

  • Annual costs are recovered across billable hours only. Test fires, samples, failed runs and idle time consume the year’s fixed costs but bill nobody, so dividing by nameplate operating hours understates the rate — at 70% utilization, by about 43%.
  • Depreciation is not a loan payment. It is the cost of consuming the machine, and recovering it is how you fund the replacement rather than being surprised by it in year six. Model interest separately.
  • Workspace allocation is usually the largest line and the one most often set to zero. The space has value even if it is your garage — it could be rented or used for something else.
  • Charge for the space the business actually occupies, not the whole building. Overstating this inflates every price you quote and can make you uncompetitive for no reason.
  • The result is a cost, not a price. Publishing your cost as your rate means running the machine for free, which is why the recommended billable rate applies your target margin.

Common mistakes

  • Counting electricity only. It is typically under 5% of the real total.
  • Assuming 100% utilization, which understates the hourly rate by a third or more.
  • Leaving workspace at zero because the machine is at home.
  • Forgetting the tube or laser source, which is a scheduled expense with a known life.
  • Double-counting consumables here and again per item in the product calculator.
  • Pricing the machine at cost, with no margin on machine time.

Frequently asked questions

How much does it cost to run a laser cutter per hour?

For a small diode or desktop machine, a fully loaded rate of roughly $3–$7 per hour is typical. Mid-range shop machines commonly land between $6 and $12, and production fiber systems with dedicated space can exceed $15. Electricity is usually the smallest component — depreciation and allocated workspace dominate.

Is machine cost per hour just electricity?

No, and this is the most common error. In the mid-range worked example, electricity is about 4% of the annual cost while depreciation and workspace together are roughly three quarters of it. Pricing from the power bill understates your machine cost by a factor of twenty or more.

What is utilization and why does it change the answer so much?

Utilization is the share of machine hours you can actually bill. Because your annual costs are fixed, they must be recovered across billable hours only. Dropping from 100% to 70% utilization raises the hourly rate by about 43%, and halving it doubles the rate.

Should I include depreciation if the machine is paid off?

Yes. Depreciation is the cost of using the machine up, not a financing payment. Recovering it is how you fund the replacement. If the machine is genuinely at end of life with no replacement planned you can reduce the figure, but zero is rarely the honest answer.

How should I allocate workspace cost fairly?

Take the rental value of the floor area the machine and its working envelope occupy, including extraction and material storage. In a shared garage, allocate by floor area and only the share genuinely dedicated to the business.

What if I run more than one machine?

Calculate a separate rate for each and allocate shared costs like workspace and software by usage or floor area. A fiber laser running ten hours a week should not absorb the same workspace charge as a CO2 machine running forty.